FX.co ★ India Inflation Rises to 20-Month High

India’s headline inflation rate edged up to 4.45% in July 2026 from 4.38% in June, marking its highest level since December 2024 and broadly matching market expectations of 4.5%. The rise was driven by renewed inflationary pressures stemming from a sharp increase in energy prices following the outbreak of war in the Middle East, compounded by the resulting depreciation of the rupee. Even so, inflation remained comfortably within the Reserve Bank of India’s tolerance band of ±2 percentage points around its 4% target.

Price gains were particularly pronounced in food and beverages (5.52%) and transportation (4.43%), both sectors adversely affected by the conflict and unfavorable weather conditions for key crops. By contrast, inflation was more subdued in housing and utilities (2.16%) and in recreation, sport, and culture (1.6%). On a monthly basis, the consumer price index rose by 0.88%.